Beijing, January 10, 2024 – Cushman & Wakefield, a world-renowned real estate services and consulting firm, released the "2024 China Real Estate Market Outlook" and the "Beijing Retail Office Market Report for the Fourth Quarter of 2023", providing an exclusive inventory and interpretation of Beijing's office market, industrial parks, commercial markets and block transaction markets in 2023, and at the same time giving a forecast of the key trends of China's real estate market in 2024.
In 2024, China's economy will gradually recover, and sustainable development will remain a key trend.
Wei Dong, chief policy analyst and head of the research department of Cushman & Wakefield, said that China's economic growth in 2023 has also achieved the expected target, and it is expected that China's economy will gradually recover in 2024 and reach 4A growth rate of 9%, while the sluggish global economy will also pose challenges to China's economic growth. In 2024**, we will increase financing support for high-quality real estate enterprises, introduce measures to boost the price index, stimulate household consumption, tap the potential of domestic demand, and under the macroeconomic trend of slow recovery, sustainable development will remain one of the key trends in China's real estate. In 2024, alternative assets such as "community-based" boutique B&B hotels and energy storage industrial parks are likely to attract interest from investors and developers.
The building economy promotes the new development of the industrial park market, and the industrial ecology changes from stock to quality.
Lu Yu, director of the industrial real estate department of Cushman & Wakefield, proposed that from the perspective of accelerating the construction of Beijing's modern industrial system, the industrial parks in Beijing will be given a new mission, which will be linked with the building economy, improve the industrial carrying capacity, accelerate the transformation and application of scientific research achievements in the local area, and cultivate new momentum for industrial development. In this context, we should not only fully understand the foundation and current situation of the development of the industrial park, but also establish an effective mechanism to upgrade the existing parks, guide the new parks, promote industrial incubation, industrial agglomeration, and industrial chain coordination, and form an industrial ecosystem of high-precision and cutting-edge achievements transformation and integrated development and high-level business office, so as to help Beijing's high-quality development.
Consumer REITs have expanded again, and the transformation of commercial real estate has ushered in new ideas.
Yang Zhi, senior director of the valuation and advisory services department of Cushman & Wakefield North and head of the assetization business, pointed out that 2023 is a year of development and growth of the public REITs market, and by the end of 2023, a total of 29 REITs have been successfully listed, raising more than 100 billion yuan, and the asset types are becoming more and more abundant. There are also a number of milestones for public REITs in 2023, such as the inclusion of consumer infrastructure in the pilot scope of public REITs in March No. 236; In the middle of the year, the first batch of four expansion REITs were successfully listed; At the end of the year, the first batch of consumer REITs was officially declared and some products were approved.
Six consumer infrastructure public REITs have been officially declared to the China Securities Regulatory Commission, with an estimated total fundraising scale of nearly 18 billion yuan. Asset types include shopping malls, outlets, and community businesses. The issuer has both state-owned enterprises and private enterprises. The asset distribution includes not only first-tier cities, but also new first-tier cities and second-tier cities, and the overall development momentum is diversified. As of the end of 2023, four consumer REITs have been approved and are awaiting listing, including China Resources Qingdao MixC City, SCP Hangzhou Xixi Impression City, Jinmao Changsha Lanxiu City and Beijing Wumart Supermarket.
The number of transactions in Beijing's block trading market reached a new high, and insurance became the most active investment institution.
Liu Bing, Managing Director of Cushman & Wakefield's China Capital Markets Department and Co-Head of China Capital Markets, concluded that the Beijing block trading market recorded a total of RMB57.6 billion in 2023, an increase of 89.9 billion year-on-year1%；The number of transactions was 59, an increase of 68 year-on-year6%, the number of transactions hit a new high in Beijing's block trading market.
In 2023, the turnover of owner-occupied buyers accounted for 49% of the total transaction value, of which 9% were office properties. Owner-occupier buyers accounted for 70% of the office format. TMT companies and state-owned enterprises are still actively trading. It is worth mentioning that publishing houses and enterprises from other provinces have become a new force for self-use buyers in Beijing. The investment targets that investment institutions focus on are more inclined to the format of public REITs that can be issued. Among them, with the liberalization of consumer infrastructure REITs and the successful issuance of affordable rental housing REITs, investors are paying more attention to the commercial and apartment formats. At the same time, insurance institutions continued to make efforts to become the most active type of investment institutions in 2023, with buyers with insurance backgrounds accounting for 41% of all investment transactions, of which 78% were invested in office properties, becoming the largest category of buyers in the office market except for self-use buyers.
The rent of the office market continues to fall, and emerging strategic enterprises may become a new outlet for market demand.
In the next three years, there will be millions of new square meters**, of which 40% will be concentrated in 2024, which will drive the vacancy rate in Beijing to continue to rise, and the rent level may continue to fall. From 2025 to 2026, with the slowdown of new market additions, the improvement of the economic situation and the improvement of corporate economic benefits, the transaction of Beijing's office leasing market will gradually pick up. In the just-concluded 2024 Economic Work Conference, scientific and technological innovation was once again emphasized. Lian Fengzhe, head of the project and corporate services department of Cushman & Wakefield, said that Beijing, as a national science and technology innovation center, has been making high-tech the top priority of industrial development for many years. A number of strategic emerging industries, such as digital economy, artificial intelligence, biomanufacturing, quantum technology, life sciences, and new energy, will become important supplements to the demand for office leasing in Beijing.
The business market is slowly picking up, and consumer demand is changing.
Meng Yi, Head of Commercial Department of Cushman & Wakefield, pointed out that 2023 is destined to be an extraordinary year for the commercial market, and the market continues to renew amid cautious optimism and positive recovery. In the new social environment, consumers' lifestyles and habits continue to change, and the lying flat economy, urban relaxation, and companionship economy have become new demands, which has also given birth to the development of park commerce, urban roaming, cute pet commerce, and curatorial commerce. At the same time, consumers' demands for business are also changing from "exploring innovation" to "pragmatism", and from cost-effective to quality-price ratio. In addition to the sustainable development of community commerce, the last mile of commercial consumption and the integration of online and offline business will become a new direction for exploration in the future. With the continuous efforts of online and offline business operators, the commercial market in 2024 will burst out with more vitality.
Hu Feng, General Manager of Cushman & Wakefield Beijing, said that Cushman & Wakefield continues to gain insight into the market and has released a number of industry influence reports in 2023, such as the "China REITs Index - Retail Real Estate Capitalization Rate Research Report", to provide first-line insights for the real estate industry. At the same time, we have been deeply engaged in the front line of the market, working closely with the city, and have become the investment partners of Beijing and various districts, helping a number of foreign-funded leading enterprises to settle in various districts, providing first-class think tank services for Beijing and various districts, re-decorating the urban life circle, and making the city sustainable and more livable.